The Financial Reform Bill, also known as the Dodd-Frank Act, has cleared congress and will go to the President for final approval this week.
The Act provides for 250 new regulations to be implemented by eleven different federal agencies. The rule-making process is designed to correct the most egregious practices in the financial sector in order to avoid the economic crisis that precipitated the collapse of many banks and financial products companies and was largely responsible for the current world recession.
Harry Reid, Senate Majority Leader, said, “Getting there hasn’t been easy. Wall Street doesn’t like this bill. Why would they want us to change the system they rigged? Their cronies in Washington don’t like it either.”
The Federal Insurance Office (FIO) will be established for oversight of the development of insurance-related laws. Its role will be advisory as opposed to being regulatory. Education is the central role of the FIO. Explaining how insurance is woven into the fabric of our nation’s financial system will be the primary focus.
The pending law will include a surplus lines insurance reform section that will streamline various regulations and make tax payment mechanisms more efficient.
The “proof in the pudding” will be just how effective, in the long run, the regulatory changes will be to guaranteeing that past harmful practices in the financial industry are never repeated.
Sources: BestWire Services; NAPSCO
Copyright: A. M. Best Company, Inc.
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